Chargeback Reason Codes

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Discover Chargeback Reason Code NF: Services

chargeback reason code nf

Table of Contents

  1. What is Discover chargeback reason code NF?
  2. What causes code NF chargebacks?
  3. What's the time limit to respond to code NF chargebacks?
  4. How can merchants fight code NF chargebacks?
  5. How can merchants prevent code NF chargebacks?
  6. About Discover chargeback reason codes

Merchants who receive a chargeback for a transaction placed with a Discover card may encounter reason code NF, which indicates an improperly processed transaction that the cardholder does not believe they should be responsible for paying. The actual underlying cause of this chargeback is usually either friendly fraud or merchant error. Merchants who believe they have received an invalid chargeback under reason code NF may be able to represent the transaction and reverse the chargeback with the right compelling evidence.

What is Discover chargeback reason code NF?

Discover chargeback reason code NF falls under the “Services” category. The shorthand description is “Non-Receipt of Cash from ATM.” This code indicates the cardholder is claiming that they attempted to withdraw cash at an ATM but did not receive the full amount they requested.

Discover cardholders are able to use their cards for cash advance withdrawals at ATMs. Sometimes, these machines do not dispense the full cash amount requested, resulting in the cardholder being charged for more cash than they received. When this happens, the cardholder can dispute the transaction with Discover and a chargeback may be filed against the merchant who owns and operated the ATM.

What causes code NF chargebacks?

Code NF chargebacks are usually mechanical problems or software glitches in an ATM that cause it to dispense the wrong amount. They can also be the result of a customer miscounting or mishandling the cash they received.

When a cardholder uses an ATM to request a cash advance and receives less cash than the amount they were charged for, they have a valid chargeback claim under this reason code.

Poorly maintained or out-of-date machines can cause these discrepancies to occur. It’s also possible for worn or dirty bills to get stuck in the machine.

While most ATMs will carefully measure out and track the bills they dispense, some cardholders may believe that it is impossible to prove with absolute certainty whether or not an ATM shorted them, and will try to file friendly fraud chargebacks based on this claim. It’s also possible for cardholders to miscount or misplace some of their cash after an ATM withdrawal and erroneously dispute the transaction. Either way, the resulting chargeback would be invalid.

Get the guide, Chargebacks 101: Understanding Chargebacks & Their Root Causes

What's the time limit to respond to code NF chargebacks?

The acquirer or merchant has 30 days to respond to a chargeback filed under reason code NF.

How can merchants fight code NF chargebacks?

  • Provide evidence, such as internal logs from the ATM, proving that the cardholder received the correct amount of cash.
  • If you have already credited the cardholder’s account to reimburse them for the error, provide documentation of the credit.

How can merchants prevent code NF chargebacks?

ATMs that are routinely maintained, serviced, updated, and kept stocked with new and undamaged bills should not have many problems with dispensing incorrect cash amounts.

Any time this mishap does occur, the ATM unit should be inspected to determine what mechanical or software problem led to the error. Faulty machines must be repaired or replaced.

The following best practices can help you avoid this kind of chargeback:

  • Reconcile ATM transactions to cash in a timely manner in order to catch any discrepancies as soon as possible.
  • If ATM logs indicate that a cardholder was shorted, notify them and provide an immediate transaction reversal or credit to correct the error.
  • Address any errors, outages, balancing issues, hardware problems, or software glitches in your ATMs promptly.

About Discover chargeback reason codes

Reason codes are alphanumeric codes that provide the justification for granting a chargeback. Pursuant to the Fair Credit Billing Act of 1974, cardholders have the right to dispute unauthorized or erroneous charges, and issuing banks must reverse a disputed transaction if the cardholder’s claim is valid.

When a cardholder contacts their issuing bank to dispute a transaction and receive a chargeback, the dispute is assigned a reason code that most closely matches the substance of the cardholder’s claims. The reason code provides the merchant and other stakeholders in the dispute with a concise explanation for why a chargeback has been granted.

Each card network—Visa, Mastercard, American Express, and Discover—defines and maintains their own unique set of reason codes, which are applied to disputes by the banks that issue credit and debit cards under their brands.

As both a card network and an issuer, Discover specifies 26 reason codes under the categories of Fraud, Not Classified, Authorization, Expired, Processing Errors, Services, and Dispute Compliance. Most of Discover’s reason codes are a two-letter abbreviation of the dispute description.

Understanding chargeback reason codes is one of the most essential parts of effective chargeback management. Identifying the chargeback reason code and the evidence required to fight it is the first step in chargeback representment, and analyzing your chargeback reason codes can provide you with insights into what types of disputes are causing you the most trouble. With this information, you can determine the root causes of your chargebacks and take action to prevent them from reoccurring.